Dell is set to undertake a significant reduction in its workforce as part of a move to shift focus towards artificial intelligence (AI) products and services. According to Bloomberg, while the exact number of job losses has not been disclosed, it is believed to affect thousands of employees, with several online sources estimating around 12,500 roles to be cut. This information aligns with data from a layoff tracking website. The layoffs are part of a strategic repositioning within the Texas-based technology giant, primarily impacting the sales and marketing departments.
“We are getting leaner,” conceded Dell executives Bill Scannell and John Byrne in an internal memo that stated the need to streamline operations and invest more heavily in AI capabilities. “We don’t do this lightly as we know these changes impact people and our teams. The destination is going to be worth it—it’s about winning and winning big!”
Dell pushing AI as it sheds back office workers
Additionally, Dell is creating a new unit dedicated to AI, focusing on developing AI-optimised servers and data centre solutions. This restructuring follows an earlier round of job cuts in 2023, where Dell eliminated 13,000 positions.
In May this year, the firm officially announced the expansion of its AI-driven innovations through the “Dell AI Factory.” This initiative aims to integrate AI more deeply into Dell’s product lineup, which includes AI-optimised PCs and workstations such as the newly introduced Latitude and Precision series. These devices are specifically designed to enhance the AI capabilities that Dell offers to its enterprise and commercial customers, improving performance, security, and productivity.
The broader tech industry has experienced a surge in layoffs, with approximately 2,000 tech companies dismissing over 250,000 workers in 2023 alone, as per layoff tracker Layoffs.fyi. Several other large firms continue to announce layoffs into 2024, with Intel planning to lay off approximately 15% of its workforce or nearly 15,000 workers as part of a cost reduction programme. Through the layoffs, Intel aims to achieve savings of more than $10bn in 2025 to “increase efficiency and market competitiveness.”
Job losses extending across Silicon Valley
As 2024 unfolds, the tech industry continues to face significant layoffs as many large firms announce job cuts, reflecting ongoing adjustments in corporate strategies and technological shifts. Among the prominent companies, Google, Amazon, and Microsoft have been reducing their workforce, impacting several hundred to thousands of employees across various departments.
These layoffs are part of broader cost-cutting measures and a pivot towards increasing automation and AI integration within operations. For instance, Microsoft made a notable reduction in its mixed reality and Azure divisions, shedding about 1,000 jobs as part of strategic realignment efforts. Similarly, Unity, a platform for creating and operating interactive, real-time content, let go of 1,800 employees, representing a quarter of its workforce, signalling a significant scale-back in its operations.
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